Table of Contents

Major Players in Pharma Industry & Market Share

CIPLA – At a Glance
– In the News

Balance Sheet

Income Statement

Ratio Analysis
Horizontal Analysis
Vertical Analysis
Major Players in Pharma Industry
 CIPLA – At a Glance

CIPLA is a leading global pharmaceutical

company, dedicated to high-quality, branded
and generic medicines.

They are trusted by healthcare professionals

and patients across geographies with a
presence in over 80 countries

Over 1500+ products across various

therapeutic categories, with 50+ dosage forms
Cipla back in black, posts Q4 profit of Rs179 crore but misses estimates
 Balance Sheet (Assets)
Particulars FY 2018 FY 2017 FY 2016
Assets In Crores In Crores In Crores
Non-current assets      
(a) Property, plant and equipment 4,158.37 4,095.16 3702.28
(b) Capital work-in-progress 435.28 540.52 512.81
(c) Investment property 0.32 0.32 0.33
(d) Intangible assets 161.66 140.10 123.83
(e) Intangible assets under
27.32 15.25 37.91
development
Financial assets      
(i) Investments 3,597.24 3,647.71 3716.26
(ii) Loans 233.13 215.75 219.37
(iii) other financial assets 40.86 57.08 40.04
(g) Advance tax (net) 283.42 192.24 172.03
(h) Deferred tax assets (net) 46.80 59.54 -
Other non-current assets 172.40 298.21 246.82
total non-current assets 9,156.80 9,261.88 8771.68
Current assets      
(a) Inventories 3,037.98 2,653.50 2918.47
(b) Financial assets      
(i) Investments 1,039.74 638.18 539.52
(ii) Trade receivables 2,336.32 1,938.79 1896.41
(iii) Cash and cash equivalents 217.45 44.60 39.76
(iv) Bank balances other than cash
10.08 13.86 13.25
and cash equivalents
(v) Loans 17.74 9.53 10.92
(vi) Other financial assets 470.71 423.42 25.73
(c) Other current assets 808.15 623.46 1023.31
Total Current assets 7,938.17 6,345.34 6467.37
Total assets 17,094.97 15,607.22 15239.05
Balance Sheet (Equity & Liabilities)
Particulars FY 2018 FY 2017 FY 2016

Equity and liabilities In Crores In Crores In Crores

Equity      
(a) Share capital 161.02 160.90 160.68
(b) Other equity 13,952.50 12,639.61 11825.20
Total Equity 14,113.52 12,800.51 11985.88
Share application money, pending allotment - 0.00 -
Non-current liabilities      
(a) Financial liabilities      
(i) Borrowings - 0.07 0.13
(ii) Other financial liabilities 50.11 45.06 42.12
(b) Provisions 124.45 125.61 132.00
Deferred Tax Liabilities - - 35.85
(c) Other non-current liabilities 75.19 80.14 88.60
total Non-current liabilities 249.75 250.88 298.70
Current liabilities      
(a) Financial liabilities      
(i) Borrowings 174.43 324.26 1131.68
(ii) Trade payables 1,580.02 1,298.21 990.84
(iii) Other current financial liabilities 273.07 440.75 484.02
(b) Other current liabilities 306.00 229.83 98.71
(c) Provisions 398.18 262.78 249.22
Total Current liabilities 2,731.70 2,555.83 2954.47
Total equity and liabilities 17,094.97 15,607.22 15239.05
 Income Statement
Particulars FY 2018 FY 2017 FY 2016
Revenue from operations In Crores In Crores In Crores
(a) Revenue from sale of products 11,004.44 10,637.08 11828.74
(b) Other operating income 440.37 337.50 288.98
(c) Other income 334.88 129.85 280.30
Total Revenue from operations 11,779.69 11,104.43 12398.02
Expenditure      
(a) Cost of materials consumed 3,303.31 2,956.04 3633.34
(b) Purchases of stock-in-trade 1,064.23 1,128.99 1037.56
(c) Changes in inventories of finished goodswork-in-progress and
-212.05 56.27 228.35
stock-in-trade
(d) Employee benefits expense 1,785.94 1,728.97 1778.56
(e) Finance costs 11.90 39.20 147.07
(f) Depreciation, impairment and amortisation expense 529.61 499.97 442.69
(g) Other expenses 3,307.83 3,256.64 3386.48
(h) Impairment of investment - 251.41 -
Total Expenditure 9,790.77 9,917.49 10654.05
Profit before exceptional items and tax 1,988.92 1,186.94 1743.97
Exceptional items 77.52 - 0
Profit before tax 1,911.40 1,186.94 1743.97
Tax expense (net)      
(a) Current tax 431.33 311.06 356.64
(b) Deferred tax charge/(credit) 11.55 -99.06 -74.97
Profit for the year 1,468.52 974.94 1462.30
Other comprehensive income      
(a) Items that will not be reclassified to profit or loss      
(i) Remeasurements of post-employment benefit obligation 2.71 10.60 -10.71
(ii) Income tax relating to these items -0.94 -3.67 3.71
(b) Items that will be reclassified to profit or loss - - -
(i) Gains/(losses) on cash flow hedge 0.72 - -
(ii) Income tax relating to these items -0.25 - -
Other comprehensive income for the year 2.24 6.93 -7.00
Total comprehensive income for the year 1,470.76 981.87 1455.30
(10) Earnings per equity share of face value of Rs 2 each      
Basic (in H) 18.25 12.13 18.21
Diluted (in H) 18.22 12.11 18.16
 Ratio Analysis - I
Cipla has not efficiently used shareholder’s funds last year
Profitability Ratios (ROE < M/R, however the debt financing has not increased
in past years.

Particulars CIPLA Ratio Market Ratio

Cipla has used its assets more efficiently than the Pharma
Return on Equity 10.91% 14.30% industry’s average last year based on ROA.

Return on Asset 10.56% 9.10%

Financial leverage is lower than market leverage indicates
CIPLA uses relatively less borrowing model for financing its
Financial Leverage 0.35% 1.74% operations & profit generations (ref. to balance sheet
borrowings etc.)
Earnings per Share
- Basic 18.25
- Diluted 18.22 Profit margin is higher than M/R, the Operational Efficiency
has Increased (COGS has reduced over years).
Profit Margin 13.34% 12.50%
Total Asset Turnover ratio remains in line with the M/R, this
Total Asset Turnover 0.67 0.62 indicates that the company is generating best amount of
revenue / sales for each dollar of assets.
 Ratio Analysis - II
Company is sitting on a good healthy Current ratio in line
Liquidity/Solvency/Market Test Ratios with M/R, thereby If needed CIPLA can pay its current
liabilities. 
The Receivable Turnover is very impressive, it calculates to
Particulars CIPLA Ratio Market Ratio approx. 71 days v/s 92 days (M/R), indicates company has
faster realization of money from the customers/traders etc.
Current Ratio 2.91 2.25
Compared to its industry peers Cipla receives its dues
Quick Ratio 1.32 1.63 quickly.
Times interest Ratio is as per Industry M/R, this says health
Receivables Turnover 5.15 3.90 of the company  and its ability to pay interest payment on
- Avg. Receivables Days 71 Days 92 Days its debts.  
Inventory Turnover 1.16 1.90 Debt to equity ratio is higher than M/R, this ratio evaluates
a company’s financial leverage (total liabilities/shareholders
Times Interest Earned 20.41 20.60 equity)

Debt to Equity Ratio 0.21 0.10 P/E Ratio is lower than the peers (eg, Dr. Reddy 39.07),
hence either this is a good news or the companies stock is
P/E Ratio 26.95 N/A undervalued.
Dividend Yield ratio is lower than other market player, plus
Dividend Yield Ratio 0.37% N/A the profit margin is higher, we might say that the company
is re-investing back into the operations 
 Horizontal Analysis – Assets
2016 2017 2018
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 Horizontal Analysis – Assets
Balance sheet FY 2016 FY 2017 FY 2018 The company has acquired copyrights, patents and
trademarks given the increase in intangible assets
Assets In Crores In Crores In Crores
Non-current assets      
(a) Property, plant and equipment 100.00 110.61 112.32
(b) Capital work-in-progress 100.00 105.40 84.88 Manufacturing plant work has been completed over the 3
(c) Investment property 100.00 96.97 96.97 years. There has also been a decrease other non current
(d) Intangible assets 100.00 113.14 130.55 assets
(e) Intangible assets under development 100.00 40.23 72.07
Financial assets      
(i) Investments 100.00 98.16 96.80
100.00 98.35 106.27 Increase in PPE indicates operational expansion
(ii) Loans
(iii) other financial assets 100.00 142.56 102.05
(g) Advance tax (net) 100.00 111.75 164.75
(h) Deferred tax assets (net) 0.00 59.54   Increasing investments points out to the company either
100.00 120.82 69.85
Other non-current assets investing in own vendors or outside companies
total non-current assets 100.00 105.59 104.39
Current assets      
(a) Inventories 100.00 90.92 104.09
(b) Financial assets       Cash has accelerated 5X, which gives the company a
(i) Investments 100.00 118.29 192.72 strong reserve for future acquisitions
(ii) Trade receivables 100.00 102.23 123.20
(iii) Cash and cash equivalents 100.00 112.17 546.91
(iv) Bank balances other than cash and cash equivalents 100.00 104.60 76.08
(v) Loans 100.00 87.27 162.45 62% increase in loans provided by the company is funding
(vi) Other financial assets 100.00 1645.63 1829.42 other companies
(c) Other current assets 100.00 60.93 78.97
Total Current assets 100.00 98.11 122.74
Total assets 100.00 102.42 112.18
 Horizontal Analysis-Liabilities
2016 2017 2018

700.00

600.00

500.00

400.00

300.00

200.00

100.00

0.00
(b) Other equity (i) Borrowings-Non-current (i) Borrowings-Current (ii) Trade payables (b) Other current liabilities (c) Provisions
 Horizontal Analysis – Equity & Liabilities
Balance Sheet FY 2016 FY 2017 FY 2018 CIPLA has an increase of 18% in the form of retained
earnings which means the company is remaining
Equity In Crores In Crores In Crores profitable on a YoY basis
(a) Share capital 100.00 100.14 100.21
(b) Other equity 100.00 106.89 117.99
Total Equity 100.00 106.80 117.75
Share application money, pending allotment      
Company has paid off its all long term borrowings
Non-current liabilities      
(a) Financial liabilities      
(i) Borrowings 100.00 53.85 0.00 Company has increased its credit purchases with the
(ii) Other financial liabilities 100.00 106.98 118.97 increase in trade payables because the operations
(b) Provisions 100.00 95.16 94.28 have expanded
Deferred Tax Liabilities 100.00 0.00 0.00
(c) Other non-current liabilities 100.00 90.45 84.86
total Non-current liabilities 100.00 83.99 83.61
Current liabilities       CIPLA has increased its short term borrowings,
(a) Financial liabilities       probably this could be a measure to go for debt
(i) Borrowings 100.00 28.65 15.41 restructuring
(ii) Trade payables 100.00 131.02 159.46
(iii) Other current financial liabilities 100.00 91.06 56.42
(b) Other current liabilities 100.00 232.83 310.00 There has been an substantial increase in provisions
(c) Provisions 100.00 105.44 159.77
for possible bad debts
Total Current liabilities 100.00 86.51 92.46
Total equity and liabilities 100.00 102.42 112.18
 Horizontal Analysis- Income Statement
2016 2017 2018
180

160

140

120

100

80

60

40

20

0
(b) Other operating income (a) Cost of materials consumed (f) Depreciation, impairment and amortisation expense (a) Current tax
 Horizontal Analysis – Income Statement
Income Statement FY 2016 FY 2017 FY 2018 CIPLA has an increase in operating income from
other sources or investments
Revenue from operations In Crores In Crores In Crores
(a) Revenue from sale of products 100 90 93
(b) Other operating income 100 117 152 Cost of materials consumed has decreased due to
(c) Other income 100 46 119 operational efficiency and economies of scale
Total Revenue from operations 100 90 95
Expenditure      
(a) Cost of materials consumed 100 81 91
Depreciation and amortisation expenses have risen
(b) Purchases of stock-in-trade 100 109 103
because of investment in PPE and/or intangible
(c) Changes in inventories of finished goodswork-in-
progress and stock-in-trade
100 25 -93 assets
(d) Employee benefits expense 100 97 100
(e) Finance costs 100 27 8
(f) Depreciation, impairment and amortisation expense 100 113 120 There is a drastic drop in the finance costs by 92%
(g) Other expenses 100 96 98 from FY 2016 as the borrowings have been all paid off
(h) Impairment of investment 0 251 0
Total Expenditure 100 93 92
Profit before exceptional items and tax 100 68 114
Exceptional items 0 0 78
Profit before tax 100 68 110
Tax expense (net)      
(a) Current tax 100 87 121
(b) Deferred tax charge/(credit) 100 132 15
Profit for the year 100 67 100
 Vertical Analysis
(a) Rev-
(a) Property, plant and enue from
Total Cur- equipment sale of
rent assets 12% products
23% (i) In-
29%
vest-
ments
11%

Total Expenditure
26%
total non-current
assets
27%
(ii) Trade
receivables
7%

(a) Inven-
(g) Other expenses
tories
9%
9%

Balance Sheet – FY 2018 Income Statement – FY 2018

Prepared by:-
Kabir Dash
Prashant Yadav
Sanchit Gupta
Sanil Yadav
Sarthak Dhanwatri